b'2020 Highlights to the agreements. Additionally, the orders include compliance and servicing standards, and require CFPB Enters into Consent Orders with Nine Separateperiodic compliance testing and annual auditing by Lenders Following Sweep of Investigations into VANationstar to confirm compliance.Loan Advertising PracticesCFPB Files First Ever Redlining Complaint Against a From July to October, the CFPB entered into nineNon-Bank Mortgage Lenderconsent orders with different Florida, California, Utah,In July, the CFPB filed suit against Chicago-based Maryland, and Delaware-based mortgage companiesnon-bank correspondent lender and broker Townstone over allegedly deceptive advertisements directedFinancial, Inc. for allegedly engaging in practices at military servicemembers and veterans. In eachthat discouraged Black borrowers from applying for instance, the CFPB alleged that the lender falselya mortgage loan through Townstone. Specifically, represented an affiliation with the VA. The CFPB alsothe CFPB alleged that during its weekly marketing radio alleged that some of the lenders misrepresented theshows and podcasts, Townstone made statements terms of credit related to VA-guaranteed mortgageabout Black borrowers and predominantly Black loans, including by failing to disclose credit terms,neighborhoods that discouraged prospective Black describing their loans as fixed rate when the interestapplicants from applying to Townstone for mortgage rate was in fact adjustable, misrepresenting theloans. The complaint cited several examples of such existence and amount of fees, and listing credit termsstatements, including the CEOs statement that one that the lenders were not prepared to offer. Finally,particular Chicago grocery store was a jungle and several of the lenders failed to adequately disclose thatscary place because [t]here were people from all they were a lender different from the borrowers currentover the world going into [it], and that the South Side lender, which, according to the CFPB, rendered theof Chicago was where hoodlum[s] lived. TheCFPB advertisements misleading. These practices allegedlyalleged that these and other similar statements violated Regulation Z, the Mortgage Acts and Practiceswould discourage prospective applicants living in theAdvertising Rule (MAP Rule or Regulation N), and theSouth Side from applying to Townstone for mortgage Consumer Financial Protection Acts (CFPA) UDAAPloans, would discourage prospective applicants provisions. In total, these actions resulted in the nineliving in other areas from applying to Townstone for companies paying $4.4 million in civil money penaltiesmortgage loans for properties in predominantly to the Bureau. According to the CFPB, its campaignBlack neighborhoods, and that prospective Black to protect military servicemembers and veterans fromapplicants would also be discouraged from applying deceptive advertisements is ongoing, so we expect tofor mortgage loans because the[se] statement[s] [are] see additional enforcement actions in this area duringdisparaging toward a majority-[Black] area. The CFPB the coming year. seeks injunctive relief, consumer relief, and civil money CFPB and All 50 States Settle with Nationstar Overpenalties for these purported violations of the Equal Alleged Servicing Violations Credit Opportunity Act (ECOA) (and its implementing In December, the CFPB, the multistate committee ofregulation, Regulation B), and the CFPA. The lawsuit, mortgage regulator (MMC), and attorneys general fromwhich is currently pending, marks the first redlining all 50 states and the District of Columbia entered intocomplaint filed by the CFPB against a non-bank lender. coordinated settlement agreements with NationstarSixth Circuit Rules that Lender Violated TILAs Mortgage, LLC (Nationstar) to resolve allegationsAbility to Repay Requirement by Failing to concerning legacy servicing practices identifiedProperly Verify Borrowers Income during 2014 and 2015 examinations of Nationstar.In July, the Sixth Circuit issued its decision in The government entities alleged that these practicesElliottv.First Fed. Comm. Bank, No. 19-3690, holding violated various consumer statutes, including thethat First Federal Community Bank violated the Truth in Homeowners Protection Act (HPA), RESPA, CFPA,Lending Acts (TILA) Ability to Repay provision. That and state UDAAP laws. Collectively, Nationstar agreedprovision, Section 1639c(a)(1), requires that to approve to pay approximately $28.5 million to settle thesea loan a lender must make a reasonable and good allegations, including approximately $22 million infaith determination based on verified and documented consumer redress, $3.8 million in attorneys feesinformation that the consumer has a reasonable and costs to the state attorneys general, $1.5 millionability to repay at the time the loan is consummated. in civil penalties payable to the CFPB, and $1.2The Sixth Circuit held that First Federal Community million in other administrative penalties and costs toBank violated Section 1639c(a)(1) because in approving certain members of the MMC and participating statethe borrower it consider[ed] spousal support and mortgage regulators. The settlements also creditedrental income that were not properly verified and Nationstar with over $62 million of consumer redressdocumented using reasonably reliable third-party that Nationstar voluntarily provided to borrowers prior 16'